Govt overpaid pensions for 30 years
The government overpaid around five per cent of public sector pensioners for over 30 years, Cabinet Office minister Liam Byrne has said.
The overpayments total £126 million – averaging £1,300 per person from 1978.
It was caused by an “incorrect indexation,” a Cabinet Office statement said, and a National Audit Office investigation would now be launched.
Pensioners affected by the overpayment will be sent letters in due course.
They will not be forced to give the money back, but many will face pension cuts.
Liberal Democrat economics spokesman Vince Cable, who brought up the issue in the Commons yesterday, demanded answers from the government.
“These figures highlight decades of incompetence. Ministers apparently knew about this in March but completely failed to come clean,” he said.
“There must be an immediate investigation to find out if there are problems with any other pension payment contractors and establish whether the Government or private contractors are responsible.”
Mr Cable is understood to have known about the issue for some time following a conversation with a Radio Ulster journalist but agreed to hold back on it until the government had decided what to do.
Retired civil servants, health service workers, teachers and armed services personnel are among those affected.
Shadow chief secretary to the Treasury Philip Hammond said: “Today’s statement leaves several important questions unanswered.
“We need to know how these errors went unidentified for so long, why they occurred, what ministers knew and when, and – most importantly – how many people will see their pensions reduced and by how much.
“It is completely unacceptable for the government just to tell pensioners they have been affected but refuse to give them the full facts until January. Ninty-five thousand people will now face a Christmas of uncertainty and fear, wondering what is going to happen to their pensions.”
The overpayments stem from Xafinity Paymaster, which pays out public sector pensions.
The Scottish National party’s (SNP) Westminster work and pensions spokesman John Mason described the blunder as “an extremely serious issue”
“These comments are very worrying,” he said.
“We need to know exactly what has happened, and exactly what the UK government plans to do.”
